SEC Number: 62893 PSE Number: File Number: ROCKWELL LAND CORPORATION (Company’s Full Name) The Garage at Rockwell Center, Estrella St., Rockwell Center, Makati City, Philippines (Company’s Address) (632) 793-0088 (Telephone Number) December 31, 2015 (Year Ending) SEC Form 17-A Annual Report (Form Type) 1 TABLE OF CONTENTS Part I BUSINESS Item 1 Business Item 2 Properties Item 3 Legal Proceedings Item 4 Submission of Matters to a Vote of Security Holders Part II SECURITIES OF REGISTRANT Item 5 Market for Issuer’s Common Share Equity and Related Stockholders Part III FINANCIAL INFORMATION Item 6 Management Discussion and Analysis and Results of Operations Item 7 Financial Statements Item 8 Information of Independent Accountant and Other Related Matters Part IV MANAGEMENT AND CERTAIN SECURITY HOLDERS Item 9 Directors and Executive Officers of the Issuer Item 10 Executive Compensation Item 11 Security and Ownership of Certain Beneficial Owners and Management Item 12 Certain Relationships and Related Transactions Part V CORPORATE GOVERNANCE Item 13 Compliance with leading practice on corporate governance Part VI EXHIBITS AND SCHEDULES Item 14 Exhibits and Reports on SEC Form 17-C 3 PART I – BUSINESS AND GENERAL INFORMATION Item 1 BUSINESS Background Rockwell Land Corporation (the “Company” or “Rockwell Land” ) is a premier property developer for residential and commercial projects that cater to the high-end and upper-mid markets mainly in Metro Manila. It is primarily engaged in the residential development of high-rise condominiums as well as in retail and office leasing and serviced apartment operations. The Company was incorporated on August 11, 1975 as First Philippine Realty and Development Corporation, which was later on changed to Rockwell Land Corporation in February 23, 1995. On September 27, 1996, the SEC approved the increase in capital stock of the Company from P1.0 million to P6.0 billion with three major shareholders subscribing to the increase, namely: Manila Electric Company (Meralco), First Philippine Holdings Corporation (FPH) and Lopez Holdings Corporation (formerly Benpres Holdings Corporation or LPZ). During the increase, the Company also amended its articles of incorporation to include the increase in capital stock and the increase in number of directors from 5 to 11. On May 4, 2000, the SEC approved the articles of merger of the Company with Hubbard Realty Holdings Inc., Farragut Realty Holdings Inc., Mc Pherson Square, Inc., and Foggy Bottom, Inc., with the Company as the surviving entity. In July 2008, the SEC approved the Company’s increase in authorized capital stock from P6.0 billion divided into 6,000,000,000 Common Shares with P1 par value each to P9.0 billion divided into 8,890,000,000 Common Shares with the same par value and 11,000,000,000 Preferred Shares with a P0.01 par value each with existing shareholders subscribing to the increase in capital. In August 2009, LPZ sold its share in the Company to FPH therefore leaving the Company with only two (2) major shareholders, namely Meralco and FPH. On February 28, 2012, the SEC approved the amendment to the First Article of the Articles of Incorporation of the Company changing its name from “Rockwell Land Corporation” to: “ROCKWELL LAND CORPORATION doing business under the name and style of Power Plant Mall; Power Plant Cinemas; and Edades Serviced Apartments”. On February 27, 2012, the Board of Directors of Meralco approved the declaration of its 51% ownership in the Company as property dividend in favor of common stockholders of record as of March 23, 2012, except for foreign common shareholders who were paid the cash equivalent of the property dividend. Consequently the Company became a public company having more than 200 shareholders. The property dividend was paid on May 11, 2012 wherein FPH received property dividends from Meralco in the form of 125,079,016 common shares of the Company. On the same date, the Company acquired 126,620,146 common shares from Meralco, representing the foreign shareholders’ entitlement from the property dividend distribution, at P=1.4637 per share. The Company was listed in the Philippine Stock Exchange (PSE) on May 11, 2012. On June 28, 2012 and July 27, 2012, FPH purchased additional shares of the Company from Beacon Electric Asset Holdings, Inc. and San Miguel Corporation, respectively. As of December 31, 2015, FPH owns 86.58% of the Company Subsidiaries and Affiliates Rockwell Integrated Property Services, Inc. (RIPSI), a wholly owned subsidiary of the Company, was incorporated in 1999 to establish, own, manage, operate and carry on the business of maintaining and cleaning buildings and other facilities. Rockwell Primaries Development Corporation (“Primaries”, formerly Rockwell Homes Inc., and Primaries Development Corporation) a wholly owned subsidiary of the Company, was incorporated in September 2012 to primarily cater to the broader market under a 2 nd brand 4 “Rockwell Primaries”. The subsidiary envisions itself to be the preferred developer in terms of providing exceptional and quality living at a more affordable price. Stonewell Development Corporation Inc., a wholly owned subsidiary of the Company, was also incorporated in September 2012 to develop socialized housing for the Parent Company. Primaries Properties Sales Specialist Inc., a wholly owned subsidiary, was incorporated in November 2012 primarily to as act the sales and marketing arm of Primaries. Rockwell Hotels & Leisure Management Corporation (Rockwell Hotels), a wholly owned subsidiary of the Company, was incorporated last June 20, 2013 for the management of hotel and resort operations. Retailscapes Inc., a wholly owned subsidiary of the Company, was incorporated in November 2014 to develop and operate pocket retail projects of the Company. The Company also has ownership in Rockwell Leisure Club Inc. (RLCI), owning 1,500 ordinary shares and 765 proprietary shares. RLCI is a non-profit premier leisure club created to complement Rockwell Land’s exclusive lifestyle concept. Opened in December 1999, the Rockwell Club offers its resident members and proprietary shareholders a first-class social, sports and recreational facility within the Rockwell Center. Business Segments Rockwell Land’s operations are divided into three (3) segments: residential development, commercial development, and hotel operations. RESIDENTIAL DEVELOPMENT The residential development segment involves the development, sales and property management of all residential units under the Rockwell and Primaries brands. This segment currently accounts for 50% of the Company’s EBITDA. Its portfolio of completed projects comprises of the following: West Block Residential Towers (2000) Approximately 2.8 hectares, the West Block was the first residential development within Rockwell Center. It consists of four towers, each named after the country’s most prominent artists and national figures. The West Block has a total of 856 residential units as follows: Hidalgo Place 251 units Luna Gardens 131 units Rizal Tower 169 units Amorsolo Square 305 units The Company completed and handed over these towers to the unit owners on time starting 1999. The Manansala (2005) After the completion of West Block, the Company introduced The Manansala in 2001 – the first residential project on the east side of Rockwell Center. It was launched to address the market requirement for smaller units. This 618-unit project was also the first project of the Company that was launched to the Filipino-American investor market. The project broke ground in May 2002 and was completed six months ahead of schedule in July 2005. 5 Joya Lofts and Towers (2008) Following The Manansala, the 931-unit Joya Lofts and Towers were launched in late 2003. The distinguishing feature of the Joya Lofts and Towers is its loft design, featuring 20 foot ceilings and a “canvass” for the unit owners’ creative ideas. The project also includes more ground for retail spaces for tenants intended to service residents’ requirements. The twin tower project broke ground in August 2004 and was completed in June 2008, six months ahead of schedule. One Rockwell (2011) Riding on the sales momentum of Joya, the Company launched One Rockwell in 2005 – its largest development within Rockwell Center with 1,275 units. The distinguishing feature of One Rockwell is its Z-loft units, which provides residents with units crossing across the corridor for views from both sides of the building. This two (2) – tower project (East and West Towers) commenced construction in February 2007 and was completed in November 2011. Turnover to unit owners started in November 2010. The Grove by Rockwell – Towers A & B (2012) The Grove by Rockwell is the Company’s first project outside of Rockwell Center in Makati and its first venture into the upper mid-market segment. The project is situated on a 5.4 hectare prime property along the major thoroughfare of E. Rodriguez Jr. Ave. in Pasig and will consist of six residential towers with a small retail and commercial area. The Grove’s master plan intends to retain 75% of its area for open-space and landscaped environment with a resort-inspired design for its 2,400 unit owners. The project was introduced to the market in late 2008 with the launch of Phase 1 (Towers A, B & Podium). Its construction was completed by end of 2012 while the turnover to unit owners started on July 2012. Edades Tower and Garden Villas (2015) Following The Grove, a 50-storey development Edades Tower and Garden Villas was launched on December 2009. It has Garden Villas which are extension of the tower and are composed of a landscaped cluster of bi-level units while the Garden Loft is a loft unit located within the residential tower that spills out to a generous garden deck. It also features six floors of serviced apartments which has a dedicated lobby and set of amenities. The construction of this masterpiece started on April 2011 and was fully completed last March 2015.